Long gone are the days where globetrotting bankers could view China as a wide open playing field for doing deals, according to a panel at ACG’s Business Conference in Los Angeles yesterday.

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During PricewaterhouseCoopers LLP’s “Doing Smarter Deals in Emerging Markets” discussion at the Beverly Hilton Hotel Wednesday afternoon, the consensus among the panelists was that even though the middle market has arrived in droves throughout China, and their Eastern counterparts are savvier dealmakers, there are still lingering cultural differences that make M&A in the region difficult.

“It’s no longer a hidden gem,” PwC’s Alan Chu told those in attendance regarding China’s evolution. “Capital is not an issue with many of these companies.”

Fellow panelist Hanson Li of Hina Group agreed.

“Companies in China are much more sophisticated and secure,” he said. “Why should they have a low valuation?”

For that, he pointed to China’s ability to grow its wine and spirits industry, as well as capitalize on the sale of women’s garments, referring to E-commerce lingerie company La Miu as “the Victoria’s Secret of China.”

Chu chimed in, calling aerospace the industry to watch for Chinese dealmakers, adding that M&A is more about “collaboration and globalization” between China and U.S. companies rather than the emerging market stereotype of doing deals quickly.

“What defines success in China is people on the ground,” adds panelist Colin McIntyre, a PwC partner, stressing the importance of cultural adaption as opposed to enforcing the Western way of doing things. “The biggest risk is reputational risk.”

Still, just as the two global economies challenge each other on a broader scale, so do middle market deal pros within the region because of the cultural differences that they face. Between language and dialogue differences, clashing accounting practices and the need for building relationships, wrapping deals up in China generally takes longer than anywhere else, they said.

For example, regulatory issues may differ from city to city, Chu said. Coupled with the growing need for Chinese companies to localize their services, and U.S. partners must make themselves privy to the subtle differences between Shanghai, Beijing and Hong Kong.

Another is structural differences, according to Walt Disney Co. senior vice president of global development Eric Muhlheim, who also spoke on the panel.

Disney looked at numerous acquisition targets in China, Muhlheim said, but in keeping with the integrity of the company’s brand, it “chose to go it alone” and grow organically in the region once it realized the structural differences of those competitors were too steep to integrate.

That differs from its acquisition strategy in another emerging market, Sao Paolo, Brazil, he said, where it is more likely for Disney to do deals because of “specialized assets” that Disney wouldn’t be able to get on its own.

During times like that, challenges are met because emerging markets provide such a wide avenue of opportunity. Even though, as McIntyre puts it, “It’s [never] easy to do business there.”

First off, we never knew that China had a government agency called the National Office of Eliminating Pornography and Illegal Publications. But it sounds about right.

Secondly, we would loved to have been a David Cronenberg fly on the wall at today’s DVD destruction as reported by LA Times Beijing correspondent Barbara Demick. Apparently, the Beijing affair was one of 31 such events held across the country today to show that China is serious about not permanently pissing off Hollywood. Writes Demick:

As the music switched from jazz to a marching anthem, officials filed onto a red-carpeted stage. In front of them were the condemned: thousands of pirated DVDs, most of them Hollywood fare, with Raging Bull, Kill Bill, Alvin and the Chipmunks, and Jaws visible on top. Riot police in helmets stood guard.

After a few speeches, the officials donned white rubber gloves and protective goggles and took their place behind machines resembling wood chippers. The police handed them bins filled with DVDs that the officials fed a few at a time into the machines, which with a terrific noise spit out slivers of polycarbonate plastic.

Chinese officials tell Demick a total of 26 million pirated DVDs were earmarked for destruction nationwide, while the operator of a Beijing pirated DVD store says three-quarters of such establishments have closed and that his days also seem to be inevitably numbered.

It needs to overhaul its educational system.

I found it both encouraging and discouraging. I sat surrounded by a roomful of Chinese teenagers who were asking probing questions about my academic experiences and other countries. They represented China’s best, China’s future, and they represented it well. But there was one big problem. They were all there to be interviewed by admissions officers from America’s top prep schools, because none of them felt they’d be adequately challenged in China’s schools.

I was in Beijing, accompanying my niece to school interviews. Like those other kids, she was thinking about going to high school in America. Why? Even at China’s most elite schools, many complain that their curriculum is all about rote learning, with little creativity. They don’t get enough opportunity to study art and drama or to pursue their passions.

I talked to parents, too, including a billionaire couple and a pair of high government officials. The billionaire father confided, “I worry my child is not getting taught morality and the whole human person. Everything is about test scores, not how to handle challenges in real life.” Other parents nodded in agreement. These were some of the people who have benefited most from China’s reforms over the last 30 years, and they all supported the direction the government has been taking the country in, yet, they worried about their children’s futures if more changes weren’t made.

[On Dec. 7, 2010, the day after this article was published, The New York Times ran an article titled “Top Test Scores From Shanghai Stun Educators,” which told of how students in Shanghai had outscored their counterparts in dozens of other countries in standardized exams. What those scores represented, though, was not Chinese educational superiority but an unhealthy focus on standardized testing. –S.R.]

Since the Great Recession began there has been a palpable shift in power away from America and toward China. Its effect on everything from commodity markets to global supply chains and military plans is undeniable. Unfortunately, not all the reforms in China are keeping up with the great economic and human rights ones the government has implemented.

To cement its superpower status, China needs to improve its educational system so it doesn’t just produce great academic research and innovation but also attracts the world’s top students. All great powers draw in the world’s best and train the future leaders of their allies and vassal states. That is soft power at its finest. The British have had Eton and Oxford, the U.S. St. Paul’s and Harvard. China needs its own global centers of learning.

Join film industry leaders from China and Hollywood—including top executives, government officials, producers, professionals and creatives—for an informative afternoon on the latest trends in co-productions and collaborations next Tuesday, Nov. 2, from 2-6pm at the Writers Guild in Los Angeles for the US-China Film Summit.

The US-China Film Summit highlights the growing entertainment media opportunities between established Hollywood and rapidly-emerging China. Event formally kicks off Asia Society‘s Entertainment and Media Initiatives. Event to be moderated by Peter Shiao, Head of Entertainment and Media for the Asia Society and CEO of Orb Media Group.

Topics include:
* Accessing financing and distribution
* Benefits and requirements for co-producing with China
* Case studies of successful co-productions
* Navigating international and Chinese audience tastes
* New market updates and realities
* Strategies for succeeding in a new East-West environment

Xiaowei Su, Deputy Director of SARFT Script Center & Writer of Aftershock
Buting Yang, Chairman of China Film Promotion International
Hongtao Yang, President of Ningxia Film Group
Dong Yu, President of Polybona Film Distribution Company, Ltd.
Lifeng Wang, President of Beijing Xing Xing Digital Corporation
Tianyun Wang, Vice President of Shanghai Film Group
Zhongjun Wang, Chairman and CEO of Huayi Brothers Media Corporation
Xun Zhang, President of China Film Co-Production Corporation
Zhao Zhang, President of Enlight Media

Wang Feng, one of the world’s leading experts on demographic and social change in China, joined the Brookings Institution last month as the new director of the Brookings-Tsinghua Center for Public Policy in Beijing, China. Wang will also serve as a senior fellow in Brookings’s Foreign Policy program, the Global Economy and Development program, and the John L. Thornton China Center. Wang comes to Brookings from the University of California, Irvine, where he served as chairman of the university’s Department of Sociology.

Wang is widely recognized as is one of the world’s foremost scholars of contemporary Chinese society, with much of his recent research focusing on the massive demographic and social transformations that have accompanied China’s rapid economic development. His work has touched on some of the most challenging and important issues China now faces in particular the social, economic and political ramifications of the country’s declining fertility rates in conjunction with its three-decades long one child policy.

Born in China, Wang has been at UC Irvine since 1996. He received his B.A. degree in economics from Hebei University in China and holds a Ph.D. and an M.A. in sociology from the University of Michigan. Over the years, his in-depth field research on China has been published extensively in both English and Chinese.

Having met Professor Feng when he taught at UCIrvine, I look forward to his continued insights and reports from the economic front in China.

With the six month long Shanghai Expo in full swing, thought I’d pass along A Lawyer’s Survival Guide to Shanghai written by Amy L. Sommers (asommers@ssd.com), a national partner with Squire, Sanders & Dempsey LLP in Shanghai.

“Visiting Shanghai can be an exhilarating, fascinating, and sometimes exhausting experience. The very traits that make Shanghai so interesting also can conspire to make it rather overwhelming. Bearing this consideration in mind, here are some tips for visitors to the “Pearl of the Orient”:

Adjusting: Flights from the United States arrive in Shanghai the day after you set out, typically in the late afternoon or early evening. This makes adjusting to the time difference (at least the first night in Shanghai) relatively easy. If possible, schedule your arrival to allow for a day to rest before your meetings start. This will give you a chance to get over the tendency in the early afternoon (middle of the night in the United States) to feel an overpowering urge to doze off (behavior that probably would not endear you to your clients and hosts).

Office Hours: Reception desks and switchboards typically are open from 9 a.m. to 6 p.m., Monday through Friday. Lawyers often work much later.

Attire: Lawyers typically wear suits (men) and dresses or separates (women). Nonlawyers may dress more casually. On the weekends, casual dress is dressier than in many parts of the United States. Even though the weather is often warm, resist the urge to wear shorts—stick with slacks or skirts. Jeans, if worn, are paired with dressy accessories. When in doubt, dress up rather than down.

Niceties: Bring lots of business cards—twice as many as you think you will need. You will be giving them to everyone. Present them with two hands and, when receiving someone else’s, be sure to take a moment to read it and try to ask a question or two (such as, “Oh, where in the United States did you get your LLM? How long has your law firm been established?”).
If a Chinese person tells you his/her English name, feel free to use it. If the person uses a Chinese name, call the person by Mr. or Ms. _ ___, not by their given name, which is used only by close friends and family.

Meals: Dinner is usually eaten around 6 or 6:30 p.m. At meals with Chinese hosts, wait until the host indicates it is time to begin before eating.

Toasts: If you are a man, it will be difficult to escape drinking China’s “white lightning” spirits, which are served in small glasses and drunk in one gulp after toasting or being toasted. As the visitor, you will be the one being toasted, and your local hosts may gang up on you so that you are taking many more shots than they are. I am not sure how to avoid this, but do try to drink lots of water while this is going on (and afterward) and be kind to your liver in the future. This is one area where distinctions between the sexes are to be celebrated. If you are a woman, when asked if you will partake, my recommendation is to smile demurely, put your hand over your glass, and say with a straight face that you never drink alcohol. This means you will not get to drink Chinese beer with the meal, which is a loss, but trust me, the alternative is far worse. And the next day, be extra nice to any male colleagues accompanying you on the trip because they are likely to be in sad straits.

Technology: Power is 220V. Even with an adapter, your appliances can be fried by a power surge. So, do not bother bringing your electric razor or other personal appliances unless you bring a surge suppressor along as well. Most business-oriented hotels will have a supply of adapters, but it doesn’t hurt to bring your own. Your phone will work in China only if it uses GSM technology. It is easy enough to buy a cheap mobile phone and a SIM card at the “Cyber Mart” on Huaihai Road (four stories of technology gadgets), so you will be able to communicate when you are on the go. In Shanghai (and Beijing) your Blackberry will be able to get reception.

Nitty-Gritty: Except in the fancy hotels like those described above, with attendants who scour and wipe incessantly, toilets in China are gritty even in a modern metropolis such as Shanghai. One must be prepared for all contingencies: toilet types (squat versus seated), toilet paper supplied versus not (assume it will not be and invest in those little packets of tissues, which you should always, always carry with you). And except in the fancy hotels, never, ever sit on a toilet seat. You will not like what you see if you look closely (such as footprints . . . or worse), so just trust me on this one.

And wash your hands frequently. With these precautions in mind, you should be fine. Do not worry about getting sick from the food (my theory is that sanitary conditions have been so poor for so long in China that those preparing food tend to be quite careful about cooking it thoroughly and not touching it with their hands after it is cooked).

Things to do: Favorite avocations include eating, shopping, more eating, some drinking (cocktails and wine by the glass are reliable only in Western-oriented establishments; otherwise they tend to be watery or corked, respectively),more eating, and massage (yes, there are shady places but most massage places are legitimate, and foot massages, in particular, are marvelous in China). The best guide for the fun things to do, see, eat, and buy in Shanghai is the Luxe City Guide to Shanghai (www.luxecityguides.com). Follow its recommendations and admonitions and you will not go wrong.

Biggest risk: Crossing the street. Seriously. Walk alone late at night, carry large sums of cash in your wallet, and never fear. But bear in mind that you take your life in your hands (or, rather, your feet) each time you cross the road. Cars, motor scooters, and bikes will be taking free right turns and free left turns. So, be on the lookout in both directions. A foreign friend who is a longtime Shanghai resident says he tells his parents when they visit to think of the traffic as three-dimensional and proceed accordingly! When possible, position yourself to the right of a local and walk and stop across the intersection as this person does. This is particularly helpful when the local is an elderly lady. Having survived the longest, they are the savviest folks around, soyou can count on being able to get safely to the other side if you follow their lead.

After you return, write me to let me know what you liked the best about Shanghai and what surprised you the most. You’re sure to have strong impressions with respect to both questions!”